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CASE NO.: Appeal (civil)  4593 of 1999

PETITIONER: The Printers (Mysore) Ltd.

RESPONDENT: M.A.  Rasheed & Ors.

DATE OF JUDGMENT: 05/04/2004

BENCH: CJI, S.B. Sinha & S.H. Kapadia.

JUDGMENT: J U D G M E N T

S.B. SINHA,  J :

INTRODUCTION:

       Validity of a sale deed dated 19.6.1985 executed by the  Bangalore Development Authority (hereinafter referred to as  ’the Authority’) in favour of the appellant herein was  questioned by the first respondent before the High Court by  way of a public interest litigation which has been allowed  by reason of the impugned judgment.   

FACTUAL BACKGROUND:

       The appellant is a company incorporated under the  Companies Act engaged in printing and publishing of  newspapers and periodicals.  For grant of  allotment of a  suitable plot  for establishing an industry, an application  was filed by it before the said Authority and upon  consideration thereof, a plot admeasuring 1 acre 20 guntas  under the Byrasandra-Travaekere-Madivala (BTM) was allotted  on a consideration of Rs.1,87,500/-.   On the said amount  having been deposited by the appellant, a deed of sale was  executed in its favour by the authority on or about  29.6.1985.  The appellant was also put in possession  thereof.   A licence for  fencing the property was also  obtained by the appellant.   

       In 1988, a public interest litigation was filed by the  First Respondent herein, inter alia, on the ground that the  impugned alienation was against public policy and, thus,  illegal and void having regard to the fact neither any  public auction was held therefor; nor any tender was called  for; nor any public advertisement for sale of the said land  was issued.   

       The contention of the appellant in the aforementioned  writ petition, inter alia, was that the said writ petition  in the nature of public interest litigation was in fact  filed by the First Respondent at the instance of one S.A.  Krishnappa who had been unsuccessful at earlier stages in  his attempt to stall the acquisition proceedings.  It was  contended that one Mohd. Ibrahim had also filed a suit to  achieve the same purpose but it was dismissed.  In the said  writ petition the locus of the writ petitioner was also  questioned.  

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       A learned Single Judge of the High Court allowed the  said writ application by an order dated 29.1.1996 holding  that the allotment in favour of the appellant herein by the  Authority being a bulk one, the same was contrary to the  provisions of the Bangalore Development Authority Act (for  short ’the Act’).   

       Aggrieved by and dissatisfied therewith, the appellant  preferred a Letters Patent Appeal.  A Division Bench of the  High Court dismissed the same holding that establishment of  an industry cannot be termed as a step towards development  of the Bangalore Metropolitan Area.  Noticing that under the  the Act three different sets of rules had been framed and  interpreting Section 38 thereof, it was held that the  provisions of the rules would govern the transfer of land.

SUBMISSIONS:         Mr. Shanti Bhushan, learned Senior Counsel appearing on  behalf of the appellant assailing the impugned judgment,  would submit that the High Court committed a manifest error  insofar as it failed to take into consideration that there  was no legal impediment for allotment of the land by the  Authority to the appellant for the purpose of setting up of  an industry for printing and publishing of newspapers.  The  learned counsel would urge that the power to lease, sell or  otherwise transfer an immovable property having been  conferred on the Authority under the Act, no illegality can  be said to have been committed in transferring the land in  question in favour of the appellant.  Establishment of an  industry for printing and publishing newspapers, it was  argued, comes within the purview of development of the  metropolitan area.  Mr.Shanti Bhushan would urge that  Section 38 of the Act confers an unrestricted power to  lease, sell or transfer movable or immovable property for  the purpose of any development scheme.

       Mr. S.N. Bhat, learned Senior Counsel appearing on  behalf of the first respondent, on the other hand, would  contend that the land in question having been earmarked for  housing, the same could not have been allotted in favour of  the appellant without any tender having been issued or  without issuing any advertisement therefor.  The High Court,  Mr. Bhat would contend, has rightly set aside the allotment  made by the Authority in favour of the appellant having  regard to the provision contained in Section 38 of the Act.   Bulk allotment, the learned counsel would argue, is covered  by Section 38B of the Act which admittedly is not attracted  in the instant case.    

STATUTORY PROVISIONS :         The said Act was enacted for the establishment of a  development  of a Development Authority for the development  of the City of Bangalore and areas adjacent thereto and for  matters connected therewith.

’Development’  has  been defined in Section 2(j) to  mean :

""Development" with its grammatical  variations means the carrying out of  building, engineering, or other  operations in or over or under land or  the making of any material change in any

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building or land and includes  redevelopment’"   

       Chapter III of the Act provides for development  schemes.  In terms of Section 15 of the Act, the Authority  may  draw up  detailed schemes for the development of  Bangalore Metropolitan Area and with the previous approval  of the Government undertake from time to time any works for  the Bangalore Metropolitan Area  and incur expenditure  therefor and also for framing and  execution of  development  schemes.  It is also entitled to take up any new  or  additional scheme from time to time.

       Sections 38 of the Act reads thus :

"38. Power of Authority to lease, sell  or transfer property.-Subject to such  restrictions, conditions and  limitations as may be prescribed, the  authority shall have power to lease,  sell or otherwise transfer any movable  or immovable property which belongs to  it, and to appropriate or apply any  land vested in or acquired by it for  the formation of open spaces or for  building purposes or in any other  manner for the purpose of any  development scheme."

       Section 38-B of the Act provides as under :  

"38-B. Power of Authority to make bulk  allotment. \026 Notwithstanding anything  contained in this Act or Development  Scheme sanctioned under this Act, the  authority may, subject to any  restriction, condition and limitation  as may be prescribed, make bulk  allotment by way of sale,  lease or  otherwise of any land which belongs to  it or is vested in it or acquired by  it for the purpose of any development  scheme. \026

(i)     to the State Government; or (ii)    to the Central Government, or (iii)   to any Corporation, Body or  Organisation owned or controlled  by the Central Government or the  State Government; or  (iv)    to any Housing Cooperative  Society registered under the  Karnataka Cooperative Societies  Act, 1959 (Karnataka Act 11 of  1959); or (v)     to any society registered under  the Karnataka Societies  Registration Act, 1960 (Karnataka  Act 7 of 1960); or (vi)    to a trust created wholly for

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charitable, educational or  religious purpose:

Provided that prior approval of the  Government shall be obtained for  allotment of land to any category  listed above."

FINDINGS: The first respondent in paragraph 3 of the writ  petition  averred :

"...In the said Link Road, huge  Industrial Estates have come up and  potentiality of the acquired lands being  increased by leaps and bounds..."

The alienation of the land in question in favour of the  appellant herein, as noticed hereinbefore, was questioned  only on the ground that no auction was held nor any tender  therefor was called for and furthermore no public  advertisement was issued prior to making of the impugned  allotment.  No contention had been raised in the writ  petition to the effect that the land could not be alienated  by the Authority for setting up of an industrial  undertaking.  In fact, as noticed hereinbefore, the first  respondent in the writ petition accepted that huge  industrial area had come up as a result whereof the  potentiality of the acquired lands had been increased by  leaps and bounds.  The thrust of the writ petition was,  thus, on legality of the acquisition of the land or amount  of compensation payable therefor.

The Division Bench of the High Court, in our opinion,  misconstrued and misinterpreted the provision of Section 38  of the Act.  A bare perusal of the of the said provision  would demonstrate that the Authority has power to lease,  sell or otherwise transfer any movable or immovable property  belonging to it, subject to such restrictions,  conditions  and limitations, as may be prescribed. The State of  Karnataka has framed three rules under the Act, namely,  (i)  Bangalore Development Authority (Allotment of Sites) Rules,  1982; (ii) Bangalore Development Authority (Allotment of  Buildings under Self Financing Housing Scheme) Rules, 1982;  and (iii) Bangalore Development Authority (Disposal of  Corner Sites and Commercial Sites) Rules, 1984.

It is beyond any cavil that the provisions of the  aforementioned three sets of  rules were not applicable to  the allotment in question.  If the provisions of the said  rules are not applicable in the instant case, the question  of power of the Authority being restricted, conditioned or  limited in selling or otherwise transferring the property  would not arise.   

In Surinder Singh Vs. Central Government and Others  [(1986) 4 SCC 667], it was held:

"6. The High Court has held that the  disposal of property forming part of the  compensation pool was "subject" to the

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rules framed as contemplated by Sections  8 and 40 of the Act and since no rules  had been framed by the Central  Government with regard to the disposal  of the urban agricultural property  forming part of the compensation pool,  the authority constituted under the Act  had no jurisdiction to dispose of urban  agricultural property by auction sale.  Unless rules were framed as contemplated  by the Act, according to the High Court  the Central Government had no authority  in law to issue executive directions for  the sale and disposal of urban  agricultural property. This view was  taken, placing reliance on an earlier  decision of a Division Bench of that  court in Bishan Singh v. Central  Government. [(1961) 63 Punj LR 75]. The  Division Bench in Bishan case [(1961) 63  Punj LR 75] took the view that since the  disposal of the compensation pool  property was subject to the rules that  may be made, and as no rules had been  framed, the Central Government had no  authority in law to issue administrative  directions providing for the transfer of  the urban agricultural land by auction  sale. In our opinion the view taken by  the High Court is incorrect. Where a  statute confers powers on an authority  to do certain acts or exercise power in  respect of certain matters, subject to  rules, the exercise of power conferred  by the statute does not depend on the  existence of rules unless the statute  expressly provides for the same. In  other words framing of the rules is not  condition precedent to the exercise of  the power expressly and unconditionally  conferred by the statute. The expression  "subject to the rules" only means, in  accordance with the rules, if any. If  rules are framed, the powers so  conferred on authority could be  exercised in accordance with these  rules. But if no rules are framed there  is no void and the authority is not  precluded from exercising the power  conferred by the statute."

In Ashok Leyland Ltd. Vs. State of Tamil Nadu & Anr.  [2004 (1) SCALE 224] this Court noticed:

"Subject to" is an expression  whereby limitation is expressed.  The  order is conclusive for all purposes.

This Court further noticed the dictionary meaning of  "subject to" stating:

"Furthermore, the expression ’subject  to’ must be given effect to.

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       In Black’s Law Dictionary, Fifth  Edition at page  1278 the expression  "Subject to"  has  been defined as  under :

"Liable, subordinate, subservient,  inferior,       obedient to; governed or  affected by; provided that;  provided, answerable for. Homan v.  Employers Reinsurance Corp,., 345  Mo. 650, 136 S.W. 2d 289, 302"           

Reliance placed by Mr. Bhat in  K.R.C.S. Balakrishna  Chetty and Sons & Co. vs. The State of Madras [AIR 1961 SC  1152] is misplaced.  In that case, an exemption provision  contained in Section 5 of the Madras General Sales Tax Act  was invoked which could be granted only subject to such  restrictions and conditions, as may be prescribed and in  that context it was held :

"...On a proper interpretation of the  section it only means that the exemption  under the licence is conditional upon  the observance of the conditions  prescribed and upon the restrictions  which are imposed by and under the Act  whether in the rules or in the licence  itself; that is, a licensee is exempt  from assessment as long as he conforms  to the conditions of the licence and not  that he is entitled to exemption whether  the conditions upon which the licence is  given are fulfilled or not.  The use of  the words "subject to" has reference  to effectuating the intention of the law  and the correct meaning, in our opinion,  is "conditional upon.""    

In the instant case, it would appear, that no  restriction, condition or limitation has been prescribed and  in that view of the matter, the High Court, in our opinion,  committed a manifest error in holding that the provisions of  the said rules would apply to any transfer made by the  Authority in favour of any person.  A similar question came  up for consideration before this Court in  Chairman & MD,  BPL Ltd. vs. S.P. Gururaja and Others [(2003 8 SCC 567].    This Court in that case examined in details the provisions  of the said Act vis-‘-vis the Karnataka Industrial Areas  Development Act, 1966.  Therein also  allotment of a peace  of land in favour of an industrial undertaking was in  question.  The Court referred to a large number of decisions  including Guruvayoor Devaswom Managing Committee and Another  vs. C.K. Rajan and Others [(2003) 7 SCC 546] and held :

"Mr. Subba Rao referred to N.M. Thomas  (supra) for the proposition that court  is also a ’State’ within the meaning of  Article 12 but that would not mean that  in a given case the court shall assume  the role of the Executive Government of  the State.  Statutory functions are  assigned to the State by the Legislature  and not by the Court.  The Courts while

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exercising its jurisdiction ordinarily  must remind itself about the doctrine of  separation of powers which, however,  although does not mean that the Court  shall not step-in in any circumstance  whatsoever but the Court while  exercising its power must also remind  itself about the rule of self-restraint.  The Courts, as indicated hereinbefore,  ordinarily is reluctant to assume the  functions of the statutory  functionaries.  It allows them to  perform their duties at the first  instance.   

The court steps in by Mandamus when the  State fails to perform its duty.  It  shall also step in when the discretion  is exercised but the same has not been  done legally and validly.  It steps in  by way of a judicial review over the  orders passed.  Existence of alternative  remedy albeit is no bar to exercise  jurisdiction under Article 226 of the  Constitution of India but ordinarily it  will not do so unless it is found that  an order has been passed wholly without  jurisdiction or contradictory to the  constitutional or statutory provisions  or where an order has been passed  without complying with the principles of  natural justice. (See Whirlpool  Corporation Vs. Registrar of Trade  Marks, Mumbai and Others (1998) 8 SCC  1).

        Exercise of self-restraint, thus, should  be adhered to, subject of course to,  just exceptions."   

       Dawn Oliver in Constitutional Reform in the UK under  the heading ’The Courts and Theories of Democracy,  Citizenship, and Good Governance’ at page 105 states:

"However, this concept of democracy as  rights-based with limited governmental  power, and in particular of the role of  the courts in a democracy, carries high  risks for the judges - and for the  public.  Courts may interfere  inadvisedly in public administration.   The case of Bromley London Borough  Council v. Greater London Council  ([1983] 1 AC 768, HL) is a classic  example.  The House of Lords quashed the  GLC cheap fares policy as being based on  a misreading of the statutory  provisions, but were accused of  themselves misunderstanding transport  policy in so doing.  The courts are not  experts in policy and public  administration - hence Jowell’s point

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that the courts should not step beyond  their institutional capacity  (Jowell,2000).  Acceptance of this  approach is reflected in the judgments  of Laws LJ in International Transport  Roth GmbH Vs. Secretary of State for the  Home Department ([2002] EWCA Civ 158,  [2002] 3 WLR 344) and of Lord Nimmo  Smith in Adams v. Lord Advocate (Court  of Session, Times, 8 August 2002) in  which a distinction was drawn between  areas where the subject matter lies  within the expertise of the courts (for  instance, criminal justice, including  sentencing and detention of individuals)  and those which were more appropriate  for decision by democratically elected  and accountable bodies.  If the courts  step outside the area of their  institutional competence, government may  react by getting Parliament to legislate  to oust the jurisdiction of the courts  altogether.  Such a step would undermine  the rule of law.  Government and public  opinion may come to question the  legitimacy of the judges exercising  judicial review against Ministers and  thus undermine the authority of the  courts and the rule of law."

The said decision squarely applies to the fact of the  present case.  Section 38-B which was inserted  by Act No.17  of 1994 w.e.f. 20.12.1975 cannot have any application to the  facts and circumstances of the instant case.  The provisions  of Section 38 and 38B operate in different fields.  By  reason of Section 38B of the Act, the legislature  contemplated bulk transfer of land in favour of the  Authorities mentioned therein which, may carry out the  development scheme or deal with the matter in accordance  with law.  The High Court, in our opinion, has not correctly  applied the principles of law governing the field inasmuch  as it cannot be said that allotment of a plot measuring 1  acre 20 guntas is a bulk allotment.  Whenever an allotment  of land is made for industrial purpose, it cannot be  restricted to a small peace of land.  The extent of land  sought to be allotted must be commensurate with the purpose  for which the same is made.

Reliance placed by Mr. Bhat upon Padma vs. Hiralal  Motilal Desarda & Ors. [2002 (6) SCALE 683] is again  misplaced.  In that case, it was categorically held that the  sale of bulk land by an institution like CIDCO was an  anathema to its objective and purpose or its establishment.   Such alienation was held to be contrary to the law dealing  with development planning.  It was further found therein  that the land in question was required as buffer for  maintaining the ecology balance. Such is not the position  herein.  

Furthermore, the writ petition should not have been  entertained keeping in view the fact that it was filed about  three years after making of the allotment and execution of  the deed of sale.  The High Court should have dismissed the  writ petition on the ground of delay and laches on the part

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of the first respondent.  The Division Bench of the High  Court also does not appear to have considered the plea taken  by the appellant herein to the effect that the first  respondent had been set up by certain interested persons.   In a public interest litigation, the Court should, when such  a plea is raised, determine the same.

For the reasons aforementioned, the impugned judgment  cannot be sustained.  It is accordingly set aside. The  appeal is allowed. The writ petition filed by the respondent  stands dismissed.  No costs.